Sales promotions are a short-term promotional technique where a company lowers prices to attract more customers and revenue quickly. The product life cycle includes four stages of development all products go through -- introduction, growth, maturity and decline. Companies may use a sales promotion at any point in a product's life cycle, though the reasons vary. Some products are promoted throughout the life cycle, while others are promoted early or late in the process.

Introduction

Introduction and decline stages are usually the most consistent points at which sales promotions occur. During the introduction stage, a company launches a product, and sales usually come from cutting-edge buyers or early adopters anxious to fill an unmet need or get the latest gadget. In highly competitive industries, companies often use sales promotions at a product launch to quickly lure customers away from competitors. A new brand of potato chips, for instance, might appear in displays at a steep discount at launch to attract attention from chip consumers.

Growth

During the growth phase, the snowball effect occurs, and product sales grow as more customers become aware of its benefits. Promotions are not nearly as common during this stage, because the market generally is aware of the product, and momentum has begun to build. However, products that struggled at launch may still be promoted in early growth stages to provide a spark to sales.

Maturity

In the maturity stage, competitors have often entered the market, and the bulk of the customer market has become aware of the product. Sales growth has plateaued. The level of sales promotions in the maturity stage depends somewhat on competition. In highly competitive industries, companies may use promotions to maintain relationships with customers in advance of a new version or replacement product launch in the near future. Similar to the growth stage, though, sales promotions aren't as necessary in this stage.

Decline

In the decline stage, product sales have begun to fall off, because most customers that wanted the product have it. As with introduction, this is a common stage were companies use promotions. The motive is different, though. Companies normally want to clear out remaining inventory of products and generate whatever revenue and cash they can. A new product launch is likely pending, and the business wants to make room in the market for the next generation.